Sports Incentive Clauses

Q

uestion: The contract for former San Francisco Giants pitcher Russ Ortiz included a $25,000 bonus if he won what non-existent award?

(You can find the answer at the end of this article.)

At contract time, today's athletes are not the least bit shy about demanding obscene amounts of money. In some cases, team owners are willing to meet those demands; however, they have no interest in watching their players flame out after signing huge deals.

The solution: incentive clauses. Athletes can get the big financial rewards they desire, but only if they meet specified performance targets.

Although we hear a lot about incentive clauses now, the concept is not entirely new. In fact, it's almost as old as Major League Baseball itself. The contract for Chicago White Sox pitcher Eddie Cicotte had a $10,000 bonus (about $170,000 now) if he won 30 games in 1917. In an apparent effort to avoid paying the bonus, owner Charles Comiskey benched Cicotte late in the season. He finished the year with a 28-12 record and was so pissed at the team that he agreed to help throw the 1919 World Series.

We'll look at some modern-day incentive clauses that helped seal the deal between athlete and owner. All funds are listed in U.S. dollars.

Ricky Williams

Rapper Master P's agency negotiated the deal between the Heisman Trophy winner and the New Orleans Saints. This back-loaded deal suggests that Master P is more proficient at rapping than repping athletes.

In 1999, Williams signed an eight-year deal with the Saints for a potential $68.4 million. While that may sound good on the surface, keep in mind that much of that dollar figure was tied up in incentive clauses. As a result, the deal could've been worth as little as $16.2 million.

According to the terms of this agreement, his annual base salary started at $175,000. The contract included $50,000 bonuses for feats such as averaging 4.5 yards per carry, getting 12 receiving touchdowns and appearing in 35% of the Saints' offensive plays. Williams could have received a $100,000 bonus for weighing 240 pounds or less.

That was all chump change compared to the largest incentive in the package: A $3 million check would've come his way if he broke Eric Dickerson's single-season rushing mark of 2,105 yards. Falling short of that benchmark would've paid nicely as the contract included other yardage-based bonuses: $1 million for 1,600 yards, $1.5 million for 1,800 yards, $2 million for 2,000 yards, and $2.1 million for 2,100 yards.

Unfortunately for Williams, he didn't collect many bonuses while in New Orleans because he never averaged 4.5 yards per carry or hit any of the above yardage totals while in a Saints uniform. He racked up 1,853 yards in 2002 as a member of the Miami Dolphins.